Share Buybacks and Shareholder Equality Analysing the 2026 Proposal to Allow Two Buybacks a Year Under Indian Company Law

Abstract

This article looks at the conflict between corporate share repurchases, or buybacks, and the fundamental corporate governance principle of shareholder equality. Buybacks have replaced cash dividends as the main way to return capital to investors. This shift has changed the balance of power in equity markets. This analysis examines open-market repurchases, fixed-price tender offers, and Dutch auction systems to show how buybacks create systemic informational and financial imbalances. Focusing on the Indian legal framework under the Companies Act, 2013, the article examines the key rules regulating capital redemptions and critiques the 2026 policy proposal to allow two buybacks within one financial year. Looking at the differing motivations of exiting shareholders, long-term investors, and corporate insiders, and using case studies from different jurisdictions—including Tata Consultancy Services (TCS), Apple, Boeing, and Bed Bath & Beyond—along with global rules like the SEC's Rule 10b-18, the EU's Market Abuse Regulation, and SEBI's tender regulations, this study explores the changing legal protections for small investors. In conclusion, the paper presents a governance framework to maintain market integrity and protect minority capital providers in a fast-changing regulatory environment.